Midwest Independent Transmission System Operator, Inc. Order Issued on September 21, 2012

“If the owners of coal plants cannot retire their plants or install retrofits in a timely manner as required by the EPA, they are exposed to liability from both the government and from lawsuits filed by environmental groups. But before the electric industry can comply with EPA’s mandates, it needs permission to act from state and local governments, FERC, the EPA, and other governmental entities. If those arms of government fail to act promptly, the electric industry will not have enough time to design, build, and install the assets that are required for compliance with the EPA. Thus, the critical question is not whether the owners of coal plants will retire or retrofit their plants as required by EPA, the critical question is whether government can move quickly enough in granting permission.

“The Midwest ISO doesn’t own any coal plants --- they operate a competitive market for power, and they help to ensure that the lights stay on reliably throughout the Midwest. Because either the retirement or the installation of pollution controls on a single coal plant can have adverse impacts on both market prices and reliability, the Midwest ISO needs to minimize the adverse impacts of EPA rules on the Midwest. Thus, in this proceeding, Midwest ISO proposes to improve its procedures for power plant retirements.

“But before the Midwest ISO can act to change its procedures, the law requires approval by FERC. And approval by FERC, according to the Federal Power Act and our longstanding policies, requires an extensive process, as described in FERC’s 66-page order that was issued on September 21 in this proceeding. That order requires substantial additional work by the Midwest ISO, and they must send FERC the results of that work in a staggered fashion: one submission due within 90 days and the other submission due within 180 days. While prompt action by FERC will be necessary, the public also has a right to comment upon the submissions of the Midwest ISO, and FERC will consider the views of the public. In the meantime, the owners of coal plants need to follow EPA requirements regardless of whether FERC has completed its work in this proceeding.

“The Federal Power Act has been a success because it provides the public with an opportunity to participate in FERC’s mandate to ensure that rates are just and reasonable. Unfortunately, this order illustrates why the Federal Power Act and our longstanding policies implementing that act were never designed to accommodate the time limitations that have now been imposed by the EPA upon the owners of coal plants.”